Exxon Posts The Highest Profit Ever By Any U.S. Company In Any Industry, But It's Not Enough

Exxon made $11.68 billion in the second quarter, says the AP, which is “the biggest profit from operations ever by any U.S. corporation,” but that wasn’t quite enough to please investors, who were disappointed.

…the results were well short of Wall Street expectations and its shares slumped 3 percent.

Apparently, earnings from competitor Royal Dutch Shell got everyone’s hopes up when their profits jumped 33%. Poor Exxon.

Oil Profits Shatter Records [Huffington Post]
(Photo: whatatravisty )

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  1. xQuizx says:

    ……..

  2. ARP says:

    Ugh-another fight about oil company profits.

    At the very least we should remove their tax breaks. Like every other company, their profits should be used for additional R&D efforts, not our money.

  3. JN2 says:

    Are stockholders (at least ones that the company listens to) ever satisfied?

  4. Saboth says:

    Heh Yeah I love the fact we subsidize them with incentives for R&D (with our tax dollars), then they post record profits…which SHOULD be going into R&D.

  5. friedgold says:

    capitalism at its finest!
    and there was absolutely no sarcasm in that statement whatsoever.

  6. nycaviation says:

    Again, $11 billion sounds like a lot of money, but their profit margin is still only 10%, compared to, say, Citibank which pulls in 35% in a good quarter, yet doesn’t get half the abuse.

  7. SkokieGuy says:

    Luckily we continue to provide billion dollar subsidies to prevent poor Exon from going bankrupt after posting profits 3% below Wall Street expectations.

  8. Tux the Penguin says:

    @ARP: Yep, here we go again. Any corporate-level tax breaks on their income should probably be stripped, but not breaks for exploration and development. We want them to be doing that, at least.

    And just remember, this profit isn’t just sitting in a vault somewhere, its going to people in the form of dividends (which is taxed by our lovely federal government) and then those people use it, whether spending or reinvesting.

  9. Bladefist says:

    @ARP: I agree. We should stop giving them money, but also stop making a big deal when they get huge profits.

    When oil is speculated high, the profit is high. The price of oil went up because of speculation, and a weak dollar. Not because of supply and demand. So you have oil, costing the same to get it, but selling it for double (the markets), then yes, they get huge profits.

    The opposite happens as well. When the oil markets crash, or atleast dip very low for a while (which usually has to do with extra supply), then the oil companies lose money.

    They have a fixed margin. A low margin. And that margin goes on top of whatever the market makes the price of oil. Please understand this.

    I’m a bit disappointed consumerist referenced Huffingtonpost. While I’m not saying the story is false, I will say they leave out details for their agenda.

    Here is another link to the story
    [apnews.myway.com]

  10. costanza007 says:

    We should be removing agricultural subsidies too, especially for the corn. Let ethanol prove its worth on its own.

  11. Hawk07 says:

    Is it possible to report The Consumerist to the The Consumerist for creating sensationalist headlines?

    Yeah, Exxon had a profit of that much, but it comes out to an 8% profit when all is said and done. It’s not like they made 11 billion and had a 500% profit.

  12. Bladefist says:

    @JN2: I dunno. Are you ever satisfied with your 401k? Or do you want it to continue to earn?

  13. Snowblind says:

    Still a pittance against what the state of California makes per gallon: 18.4c + 7.25% sales tax, or 47c per gallon.

    They did not even have to pump or distribute the gas, they just have the gas station operators send it in.

    Now THAT is a Return on Investment!

  14. kaptainkk says:

    @Bladefist: Huffington Post rules!

  15. AvDub says:

    @Bladefist: Good point. And not to split hairs JN2, but investors were certainly not unhappy about Exxon’s results – they’re getting their money. But Wall Street operates on expectations, and if a company ‘fails’ to meet those, the stock takes a hit.

  16. friedgold says:

    really consumerist? this is a widely published story across most major news outlets, and you choose to link to the huffington post?

    at least pick a news outlet that pretends to be nonbiased.

  17. @Tux the Penguin: And also paying their employees, as well as their benifets, and 401k’s.

    Can everyone think about a scenario for a second. Let’s say Exxon earns $.07 profit on a gallon of gas. They sell 10,000,000 gallons. That’s $700,000.00. The next year, they make $.06 profit a gallon, but demand soared, and they sold 30,000,000 gallons. All of a sudden their profits DOUBLED to 1.8 million. But they made less money per unit. Can anyone of the profit mongers here HONESTLY say that we are consuming less gas both as a country and as a planet.

  18. EBounding says:

    Would everyone feel better if they took a loss? If so, how would that help you?

    Only about 13% of their profit was from refining and gasoline sales. The rest was from their oil extraction and production operations. Since the global price of oil has practically doubled in a year, of course their profit has gone up. There’s no reason to produce something if there’s no incentive (profit).

  19. The Warrior-Poet says:

    The dollar amount of profits is meaningless when taken out of context. What were they as a percentage of sales? Or, even more importantly, as a percentage of the assets used to produce those profits? If I paid $10 for the cardboard box, pitcher, mixing spoon, and so forth to set up my lemonade stand and kept $1 for the afternoon after subtracting the cost of lemons, sugar, water, and cups from the dimes I collected, I did a heck of a lot better than Big Bad Company, Inc., if they only kept 1 gazillion ducats after investing 20 gazillion ducats to set up their business, comprende? (Moreover, stockholders are trying to estimate the future growth of that profit stream. If prospects are less than expected, as was the case following Exxon Mobil’s second qurater report, the value of a share goes down.)

  20. Bladefist says:

    @EBounding: These stories bring the socialists out of their parents basement.

    But not all is lost, fortunately its mainly due to a lack of understanding of how the oil industry works. And a lack of understanding that our economy, for better or worse, is wrapped around oil.

  21. @Git Em SteveDave is a poor substitute for LindsayJoy: And anyone who thinks that oil comapnies/car makers are preventing alternative fuel vehicles from being invented, please consider this. WHY would a company turn a blind eye to something which, if we listen to the doomsayers, we will need in less than a decade? There is a visible market for these cars, but it’s not a viable market nor viable cars for the majority of Americans. The only thing keeping Alternative cars from being accepted is the public in this country. They want cars that can do things electric cars can not/can not easily do. They may never do them, but they want the ability to.

    Oh and Tux, I wasn;t bashing your comment, BTW.

  22. SkokieGuy says:

    @Bladefist: Disagreement doesn’t require name calling.

  23. The Warrior-Poet says:

    @nycaviation: Whoops, you beat me to the profitability angle (profits as a percentage of sales). I still can’t argue enough for the return on assets approach. After all, two companies might share the same profits/sales percentage, but maybe one of them used less capital (or investments) to generate the same profitability. And it would be even better to estimate a company’s ability to continue generating wealth over future years.

  24. Bladefist says:

    @SkokieGuy: I didnt call anyone any names. I didn’t even direct it towards any one person.

    Simply pointing out, there is a TON of people who simply don’t understand how it works. I’m not saying they don’t have the mental capacity to understand, most of it is due to emotions. They hurt at the gas pump, and need someone to hate. Emotion overruns thought.

    Am I wrong?

    My socialist comment was light-hearted, and I intentionally did not direct it at any one person.

  25. Silversmok3 says:

    A company in a market makes a profit.Whoa.mind blowing, dude (/sarcasm)

    Focus on the Lenscrafters ,Consumerist,which does make about 500% profit on its items.

    As far as tax breaks go,evidently people forget that people, typically wealthy ones,not companies, are the ones who cheat the tax system the greatest.

  26. The biggest profiteer in the whole thing is the fed govt. They make 2x as much as the oil companies take home in the taxes on this stuff.

    BLAME THE REAL ISSUE, BIG FAT CAT GOVT.

  27. cmdrsass says:

    HuffPost? Comeon Consumerist, you can do better than that. This isn’t Digg, ya know.

  28. Techguy1138 says:

    @Git Em SteveDave is a poor substitute for LindsayJoy:

    I think that the bigger oil companies have developed some great alternative fuel technologies and continue to do so so that when the inevitable fall of oil happens they are poised to profit. Oil is a long tern strategy industry.

    US auto makers have had no such long term goal. They depend on using the same technology for as long as possible and crushing anything that is a challenge to the status quo.

    If automakers HAD seriously invested in technology the US would be able to jump ahead of any auto trend soon after it starts. As it stands now they are woefully behind foreign back firms.

    Back to the article.

    I can’t quite understand the relation of stock price to company profits. I am a shareholder in XOM and find that except for the CEO over compensation and need to put additional resources into alternative energy development, they are doing a good job.

    They have been paying really good dividends the past few years. Given their reserves and future prospects I don’t get why they are sub $100.

  29. Techguy1138 says:

    @SkokieGuy:
    “Disagreement doesn’t require name calling.”

    The internet is the only place where a debate between someone calling them self “bladefist” and “skokieguy” can illicit that quote seriously.

    –Techguy1138
    At least my parents didn’t name me ‘thx.’

  30. joellevand says:

    Can we stop subsidizing them now? Please?

    I demand less government hand-outs to businesses NOW!

  31. SinisterMatt says:

    Somebody call the waaahmbulance.

    (Not talking about the commenters, but about the investors).

    Cheers!

  32. Quatre707 says:

    At least it’s an American company profiting from sales to Americans, instead of some foreign giant making billions off Americans.

  33. basket548 says:

    @Techguy1138:
    Great points, all. To shed a bit of light on your stock price question, the price of a stock has virtually nothing to do with the actual dollar amount of profits, and much more to do with ratios. Though I am clearly too lazy to look them up right now, examine the stock price to earnings per share (commonly called the P/E ratio) and compare those to other stocks, and that will give you a better measure of how Exxon is doing.

  34. basket548 says:

    @Quatre707:
    Oh, there are a lot more foreigners making a lot more money off this than Americans.

  35. SkokieGuy says:

    @Bladefist: You often have strong opinions,(which we are all entitled to), but I often pick up a bullying tone in yours, rather than humor. This one sounded Rush Limbaugh-esque making fun of anyone not ‘intelligent’ enough to agree with your point of view.

    And back to the post – subsidies are outrageous, but not the only issue. What about the deregulation of the securities industry that helped enable the current level of speculation? What about the oil industry’s ties to government and the free flow of bodies from private industry to regulatory agencies and back? What about the demands to offshore drilling rights when millions of acres of leases are not being utilized? What about the closed door meetings regarding future energy policies with industriy executives? I could go on and on.

  36. johnperkins21 says:

    @Git Em SteveDave is a poor substitute for LindsayJoy: No, this is profit. They’ve already accounted for payroll, including taxes and benefits. This is the money left over after paying all of their operating costs.

    So what if it’s only a small percentage of their total revenue. It’s still 11 billions dollars… in three months. I’m all for corporations making a profit, it is as friedgold pointed out, capitalism at its finest. However, this is above and beyond what they should be making off of the consumer. $5/gallon for gas is ridiculous when these guys are posting profits of up to $44,000,000,000 a year.

    It’s a difficult thing, because people should be paid for their hard work. They should be able to make as much money as they can, but to a point. The US economy is in the toilet right now and these guys are posting record profits. Something is wrong here. I don’t have the answer, or all the facts, but I think we need to do some serious re-thinking of the situation as a nation to help get this all under control before we turn into one of those third world countries where there’s a few super-wealthy people at the top, a scant few middle class and everyone else in poverty.

  37. Fredex says:

    They also sent $32.361 billion in taxes to various governments in the second quarter.

    In this Great, Free, Capitalist country of ours, anyone dissatisfied with the oil companies is free to start their own oil company. Go for it.

  38. basket548 says:

    @SkokieGuy:
    And you often pick out tiny bits of information and try to twist them to serve your opinion from a very populist standpoint. Can you provide links to back up some of your points? Or at least provide hard data in your comment?

  39. Techguy1138 says:

    @basket548:
    Thanks but even then the pe ratio doesn’t help much.
    Looking at aapl as an example it has an p/e of around 30 while xom has a p/e of around 13.

    My basic understanding of p/e mean that the price of the stock is 30x the yearly earnings. This seems to sit near IBM and NTDOY. The Ibm share price is $130 while Nintendo is near $65. All XOM, NTDOY and IBM are established leaders in the fields. They have all shown good profits. So why with similar P/E ratios and established histories is there such a spread in the stock prices?

    Is it due to the amount of outstanding stock? By valuation standards shouldn’t appl stock be 1/2 – 1/3 what it is currently selling for?

  40. basket548 says:

    @johnperkins21:

    “So what if it’s only a small percentage of their total revenue. It’s still 11 billions dollars… in three months.”

    Seriously, learn a bit of finance before making blanket statements. The proportion of revenue is a HUGE factor in evaluating profits. You simply cannot judge on the actual dollar amount alone.

  41. Techguy1138 says:

    @Techguy1138: Sorry for the mis type.

    “This seems to sit near IBM and NTDOY”

    should read

    XOM 13~ p/e ratio sits near IBM and NTDOY.

  42. J.Heck says:

    @nycaviation

    You’re right, except, Citibank’s profits are going up because the people need their services just to keep their heads above water. Citi’s profits are the symptom while Exxon’s and others are the problem.

  43. friedgold says:

    @Techguy1138: stolen from wikipedia:
    he P/E ratio (price-to-earnings ratio) of a stock is a measure of the price paid for a share relative to the annual income or profit earned by the firm per share. A higher P/E ratio means that investors are paying more for each unit of income.

    For example, if stock A is trading at $24 and the earnings per share for the most recent 12 month period is $3, then stock A has a P/E ratio of 24/3 or 8. Put another way, the purchaser of stock A is paying $8 for every dollar of earnings.

  44. Bladefist says:

    @SkokieGuy: Well you are probably right about me most of the time. I try to remain respectful to everyone, but I do get a little tense on some topics where I feel like people debate w/ their emotions, not with logic.

    Ok-
    Deregulation – The market can do better. Speculation went through the roof. Americans said no. We got serious about alternative fuel. Demand crashed. The speculators know they cant bully us. We threatened alternative fuels, threatened offshore drilling, ANWAR, and reduced our consumption, and oil is still falling.

    Government Corruption / Ties / subsidies – Your fault. My Fault. We elect neophytes and/or sell outs because of their smile, religion, color, and not force them to be accountable. Don’t ask enough questions on the issues. Media is to blame as well.

    Offshore Drilling – It’s privatized, oil companies will drill where its most profitable. IE less regulations, less taxes, and they are sure there is plenty of oil under the ground. The oil companies have went through each place and stated why they wont drill there.

    Closed door meetings – Huh?

  45. basket548 says:

    @Techguy1138:
    Yes, it is often due to the amount of outstanding stock – simply a different divisor. So it looks like Nintendo has twice as much physical stock outstanding than IBM, causing the price diff in the actual share.

    Note that all those stocks are in technological fields, and so have similar P/E ratios – check out a couple other energy stocks, and look at historical P/E, say, going back to the late 90’s. I suspect you’ll find a jump somewhere along the way.

    If you’re wondering why P/E ratios differ among industries, it has largely to do with growth potential and the amount of assets required to make a profit. Apple needs very little hardware to make software / computers, while Exxon needs all kinds of heavy equipment and machinery to extract oil.

  46. ARP says:

    @Git Em SteveDave is a poor substitute for LindsayJoy: I think there’s more to it.

    We’re willing to give oil companies any spot on the earth to drill (even if it means spending a trillion dollars of our money to fight a war or two), so why would they invest in alternate energy?

    Oil companies don’t use most of the drilling leases they currently have because they know they can simply threaten the government and consumers with higher prices and we’ll fall over each other trying to give them places that are easy to drill, costs be dammed (environmental or the costs we pay in the form of wars, buying up land, etc.). BTW- the rumor the Katrina caused no oil spills and so offshore drilling is safe is a huge lie (here are Sat images of the spills: [skytruth.mediatools.org]).

    I guess the question is, are we OK with that? If we know the financial, political, personal safety (starting wars doesn’t make us many friends), and environmental costs of this policy and still do it, that’s fine, we’ll have to live with the consequences.

  47. Consumerist-Moderator-Roz says:

    @Bladefist: You’re out of line. Debate if you like, but keep it civil. Insults and name-calling are beneath you and this site.

    Folks, let’s remember the comment code. To wit:

    “Objections to an editor’s headlines or writing style or a post’s entire existence should be emailed directly to the post’s author.”

    No further comments along these lines.

  48. MrDo says:

    Is it too much to ask for a post about profits that actually understands basic economics?

  49. The_Gas_Man says:

    @kaptainkk:
    The Huffington Post is more biased and less truthful than a Pat Robertson broadcast.

  50. SkokieGuy says:

    @basket548: I was challenging bladefist’s tone, not challenging his facts, which also don’t include citations or links.

    The fact that oil industry executives have closed door meetings has I thought been common knowledge to those who are politically active.

    “Cheney and many of the Bush Administration’s largest political fundraisers were extremely active members …..One of the major initiatives the group got the Energy Department to consider during Cheney’s tenure there was a wide-ranging exemption for the energy industry from public disclosure laws.

    The NPC [National Petroleum Council], designed to provide the government with the industry’s expertise, was created by President Harry Truman after World War II. The council has 175 members that are asked to serve by the Energy Secretary for two-year terms. Membership includes academics, environmentalists, as well as oil and gas company representatives. Yet according to records analyzed by the Center, an average of about 45 people attended select committee meetings from 1999 to the present. The vast majority of attendees were oil and gas executives; none was from an environmentalist organization.
    [projects.publicintegrity.org]

    Exxon lobbying, 1st quarter, 8.3 million
    [www.opensecrets.org]

    I leave this thread to others.

  51. The_Gas_Man says:

    @MrDo:
    To be fair, they didn’t really say anything here but report a couple basic facts. I think everyone is reading too much into this post.

  52. basket548 says:

    @Techguy1138:

    Just checked it out. P/E for XOM has actually dropped significantly since about 2000, where it was in the high 30’s. I think that says that investors don’t expect earnings to rise much in the future. Interesting.

  53. barty says:

    @joellevand: Two words…Fair Tax

    No subsides or special treatment for anyone. It doesn’t penalize “good” financial behavior like saving money and investing like our current tax code does.

    Everyone cries to end the subsidies and tax perks we give to industry, but then just totally ignores the stats out there that points out that the US has the 2nd highest corporate tax rate in the world, only behind Japan, and we wonder why we continue to bleed jobs and investment. Follow the money folks, look at the countries where the money is going to and look at their tax rates and regulations. I’m not saying we need to let business run willy-nilly, but its safe to say that we’ve gone a bit overboard here in the US.

    I’m rather pleased that thus far the “windfall profits tax” crowd hasn’t chimed in yet. Maybe they’re finally starting to learn the difference between net profit and a profit margin!

  54. opedog says:

    @johnperkins21: The silly thing here is that what if instead of 1 really big company making eleventy billion dollars, if it was 100 smaller companies making 110 million dollars (for arguments sake). Would the outcry (or propaganda) be as high? Of course not. It just doesn’t sound the same. “110 million dollar profit is OBSCENE!” See?

    But, here’s what gets me. They make 10 cents or so on every gallon of gas sold. Well, it appears they sell a lot of gas. If you pay $4.00 for a gallon of gas, Exxon makes $0.10. That should really put the volume of gas they sell into perspective.

    To those of you who’re in the OBSCENE crowd: What’s a proper number they should be making per gallon? 5 cents? 1 cent? Is that reasonable to you? If so, how can you justify that? Gas costs $4.00 one day, and then Exxon decides to be magnanimous to everyone (but their shareholders) and then the next day gas costs $3.91. Is this what would make you happy?

    And again, if so: How do you justify that? When are these giant oil companies allowed to make a profit befitting their size and service (many other industries make A LOT more per unit of measure: banks, manufacturing, tech, etc)? When it’s back down to $1.00 a gallon?

  55. Aphex242 says:

    Fear the evil satellite radio monopoly!

    Honestly, doesn’t this put that stupid argument into perspective?

    11 *b*illion dollars. Wow.

  56. matchsmalone says:

    @Consumerist-Moderator-Roz: Has the post since been edited? I don’t see any insults or name-calling. Especially when reading this, it seems he’s definitely not trying to be insulting. The comment code says “Express contrary opinions, but treat others as you would like to be treated.” I would think he falls within the bounds of that. He wasn’t objecting to the post or the writing style, he was offering another opinion on the post, which is itself an opinion.

    I was just surprised to see such a strongly worded rebuke, when there are much more offensive comments.

  57. zundian says:

    @rainmkr: @Snowblind:

    When your State or Federal Governments actually turn a profit, *then* you can complain about how much money they take in. Last surplus year was FY 2000 (10/99-10/00)

  58. stevejust says:

    Regarding shareholders being sad and needing a whambulance, this is from MSN:

    [articles.moneycentral.msn.com]

    Exxon is having trouble keeping production up: It pumped just 3.8 million barrels a day in the quarter, the lowest daily average in three years. Meanwhile, as the price of the crude oil it uses to make gasoline and other fuels rose, refining profit fell 54% to $1.56 billion.

    If you read the whole article, you’ll see that while having record profits for the first quarter are great and all, the concern is just why is it that Exxon has been spending more money than ever looking for oil, and not finding any?

    Oh. Yeah. There are people who said this was going to happen, weren’t there? And those people were called alarmist, idiot, luddite, pinko-whatevers.

    And I know some people are going to say that other companies are out-maneuvering Exxon and getting to deposits before them. But I hate to break this to you all, I think T Boone Pickens’s call that peak oil happened in 2005 is correct.

  59. Roy Hobbs says:

    @Consumerist-Moderator-Roz: Maybe its me, but I don’t see where he’s that far out of line.

    Arguing economics and finance with people who clearly have no understanding of those concepts would make my head explode; I actually congratulate him on his restraint.

  60. WraithSama says:

    @Git Em SteveDave is a poor substitute for LindsayJoy:

    Just so you know, a company’s profit is the amount that remains AFTER expenses, which includes payroll, benefits, etc. So, no, none of the things you mentioned come out of this astronomical profit that has been posted.

  61. Wormfather is Wormfather says:

    @Bladefist: I always love the supply and demand article.

    “So its like when the bakery only has four peanut butter cookies left and five people in the store?”

    “yes”

    “Ohhh, ok, who wants oil and isnt getting it”

    “Well it’s too expensive”

    “Nah ah ahhhh, it’s there, it’s available…’

    round and round we go.

  62. Wormfather is Wormfather says:

    @Roy Hobbs: WINNAR!

    Blade and I are like lightning rods around here and I’ve seen both of us step over the lines, this time however he was fair.

    Eitherway Roz has got a tough job, you cant walk lightly with a big stick around here.

  63. Kirk Douglas says:

    Boy am I glad I’ve invested in several of the major oil companies.

  64. Meg Marco says:

    @friedgold: @Bladefist: You both need to chill out. It is an Associated Press article hosted by Huffington Post. [ap.google.com]

  65. Zephyr7 says:

    It’s like the greed is turned up a notch, now that depletion of the resource is getting closer…

  66. Raiders757 says:

    It’s pretty sad that people go hungry, and live without a home in the U.S.(…or anywhere), yet a company like Exxon can rape the world for such high profits. They could give each and every U.S. citizen one million dollars, and it wouldn’t even dent their wallat.

    Not that I expect a hand out, but were only talking less than four hundred million dollars here. That wouldn’t even dent their wallet.

    The more I think about stuff like that, the more I realize we have created a shity system. There is no reason for anyone to go hungry, or be without decent shelter.

  67. Ben Popken says:

    The article is an AP article that happens to be on Huff Post. Please familiarize yourselves with the concept of “wire services.”

  68. opedog says:

    @Raiders757: Uhhhhh, what?

    $1,000,000 * 250,000,000 people == 250,000,000,000,000

    That’s like… 250 trillion dollars, man.

    [www.google.com] if you don’t believe me.

  69. jackal676 says:

    I’m with ya, Roz. The “socialist from their parents’ basement” language doesn’t come across as lighthearted humor. Bladefist, explaining your intent a few posts later does help clarify, but language like that in straight text (without vocal cues or body language) conjures an image of bullying.

  70. DoctorMD says:

    With inflation and dollar so bad we should start reporting profits in tons of gold. I love a devalued dollar causing records in everything and a false non-recession.

  71. Bladefist says:

    @Roy Hobbs: @matchsmalone:
    @Wormfather is Wormfather:

    The comment was not edited. But due to me being a conservative/republican, I’ll be silenced eventually.

    @Ben Popken: @Meg Marco:

    Ok my bad. I missed the 2×2 pixel AP icon on the site.

  72. @johnperkins21:
    @WraithSama: I notice that you acknowledge my first point, which was to show that Oil companies DO pay employees, and that some of the money they make goes towards that. BUT I also notice no one addresses my second point. Why demonize oil companies when we are buying it? Has their profit increased per gallon, or are they selling more oil? How can you fault a company for selling product people want. Should we take profits from a farmer b/c he sells more corn than he did the year before? How about Apple? People by TONS of their products. When a new one comes out, people buy it, and their profits increase. They didn’t make us buy it, we wanted to buy it. Should we take profits from Kraft and ConAgra? If they come out with a great new chip, and everyone buys it, their profit soars. But I’m sure you will say they are gouging b/c we need to eat.

  73. jstonemo says:

    @opedog: Actually, the US population is over 300 million. But you point is correct. Maybe he meant that we can all get a dollar each. That should go far! I could get a quart of gasoline!

    Apparently Raiders757 flunked math class and spelling. “shity” system? The shitty system is obviously the US education system.

  74. Meg Marco says:

    @Bladefist: Not to be a bitch, but I also cited the AP in the first sentence of the post.

  75. Bladefist says:

    @Git Em SteveDave is a poor substitute for LindsayJoy: Because people feel they are being forced, to get ripped off. They have to drive, they don’t have to go to walmart.

    There does need to be some demonizing. But its misdirected. The oil companies have to make a profit. It’s a very high risk industry.

    I would/have demonized the speculators. Even when my republican party denies its the speculators. The speculators and the weak dollar. Luckily, its extremely easy to inject fear into the market, so you can scare those speculators with small things. Like Bush lifting his ban. Meant nothing. But it scared them. Then data came in and showed America is using less. Now they are really scared. And the speculators are watching this election very carefully.

  76. stevejust says:

    @Bladefist: But due to me being a conservative/republican, I’ll be silenced eventually.

    Go tell it to Fox News. Or I’m sure Glen Beck will have room for you on his show. Or Rush Limbaugh, G Gordon Liddy, Michael Savage or some other radio talk show.

    Republicans have the Whitehouse. Republicans have 49 members in the senate. They have 199 in the House, and until 2006 you had a majority in both. Republicans have 5 or 6 on the US Supreme Court depending on how you count. Republican judges comprise a majority in 9 of the 13 federal district courts (if not more). The idea that there’s some vast conspiracy to silence republicans is asinine.

    By contrast, aside from Keith Olberman and Stewart/Colbert, name one single truly left wing commentator on TV. And that’s why people like you run around thinking that the RELEVANT measure we should be talking about is the percentage of profits to revenue, rather than the total net profits in this given quarter.

    Do you understand how upsteam and downstream operations of a company like ExxonMobil interact? Do you know that ExxonMobil has pipelines, chemical company subsidaries, drilling operations that all distribute profits and losses across all the different subsidaries as they see fit, and that just looking at their 10Q shows very little about what’s really going on in their P/E ratios?

  77. drjayphd says:

    @everyone discussing subsidies: So we’re in agreement, no subsidizing corn, oil, and other industries that don’t need the government propping them up, and instead subsidize businesses that would greatly benefit from government investement. Also, abortions for some, little American flags for others. :)

    @Bladefist: Ah geez, not the CONSUMERIST LIB’RUL BIAS! bit again. You’re better than that. You’ve already shown in this post that you can intelligently argue points. stevejust said it best in that conservatives can hardly be called persecuted or that there’s a vast movement to silence Republicans. You’ve got a good chunk of the airwaves and government, it’s not like anyone could marginalize conservatives, even if they wanted to. But enough about this, back to the flapping of gums about them evil oil companies.

    (also, a humble suggestion to the editors, think it’d even be necessary to edit the post to mention the story’s from the Huffington Post by way of the AP?)

  78. Bladefist says:

    @drjayphd:

    Also, abortions for some, little American flags for others. :)

    Lol nice. I don’t touch the abortion subject though :-)

    I don’t see many people here who are for subsidizing oil, corn etc. I think subsidizing for industries that obviously don’t need it, is corruption. It’s simple. If oil went back down to .50 a gallon, I’ll revise my statement.

  79. trujunglist says:

    @Bladefist:

    As you may or may not know, I’m a pretty left-leaning person, but I agree with you! Huffington Post is like linking to Fox News; only an insane person would think that they were fair and balanced and worthy of being linked/reprinted as actual news.
    Or maybe you think Fox News is OK but Huffington is bad. I’ll assume, for the time being, that you’re well-reasoned and not retarded.

  80. Roy Hobbs says:

    @stevejust: @drjayphd: It is easy in much of society to be liberal or left of center or democratic, especially in larger urban areas. I could be glib, but let’s just say that typical policies from that side of the aisle revolve around everyone being nice to each other.

    Traditional conservatives, and I do not group the current bunch that’s running things under that umbrella, however, recognize that reality intrudes upon utopian visions, and that there are certain laws (not theories, laws) of economics that we are all subject to.

    Try spending your time arguing reality to traditional liberals, however, and you’ll quickly find yourself shouted down. It has happened to me on more than one occaision here in Seattle, and is never pleasant in person.

    So when we see what we believe to be a bias (most of the major networks and the Obama love-in would be exhibit #1), we may get a little tender from time to time.

    Bladefist is a little more upfront about it, but the points he makes are generally well-reasoned and delivered with a minimum of vitriol, unlike drjayphd’s “CONSUMERIST LIB’RUL BIAS! bit again comment, which implies that all conservatives are red staters who are apparently incapable of pronouncing the “er” sound. Or are small-minded, however you want to take it.

  81. @Ben Popken: @Meg Marco: But the citation indicates which sources you are using to obtain your stories, regardless of the actual content origination on the wire services. I don’t think there’s anything wrong with Consumerist using HuffPost or some other similar outlet to find stories (and actually assume that it was a reader who found and sent the story to Consumerist), but it does imply a certain predilection or bias on the part of the editorial staff. That ideological inclination, too, is fine, but let’s all be open about it, yes?

    @Bladefist: I doubt you’ll be silenced, as you’re pretty popular, your contributions are far better reasoned than most, and your track record is pretty benign. I’m inclined to doubt that your political affiliation (mine) is the reason you’ve been given warning in this thread, and hope that Roz will be as quick to admonish the folks who automatically respond to every article with “This is the fault of Bushitlerburton and his evil Republican minions” as she continues to enforce the code of commenting conduct.

    As for the story: Yes, oil companies turn profits. Oil companies deal in a product which generates massive revenues. Thus, even relatively low profit margins yield enormous absolute dollar amounts. This story serves as a reminder that oil is indeed a huge business, nothing more, and it’s comforting to see so many commenters supporting capitalism instead of demonizing Exxon et al.

  82. trujunglist says:

    P.S. It’s a sad, sad day when someone gets called a socialist and everyone gets all pissed off because it’s against America. This isn’t the 50’s; we’re not pinko commies. Captain America said it best in Avengers #6: “The greatest mistake is to think that compassion equals weakness!” Actually, that’s not the exact quote, but it’s something like that.
    Personally, I thought the “parents basement” part was much more offensive.

  83. Roy Hobbs says:

    @Roy Hobbs: Forgot one thing – let us not focus on what divides us, but what unites us: an undying hatred of Comcast, Bank of America, and every other company that attempts to screw the consumer.

  84. Nik in Denver, formerly in NOLA says:

    I’d rather see/hear multiple viewpoints on issues than have one shouted down (unless its beyond insane/doesn’t grasp basic facts). Even though I may not agree with the guys on the other side of the spectrum, I’ll at least listen and possibly learn something.

    Issue at hand: I mean, at first its shocking. Telling some random person at the pump that doesn’t understand how to read these things that Exxon pulled down a huge profit is a great way to get negative soundbytes. But oil is a profitable business, and always has been. It sucks that they’re essentially making it off the backs of everyone, but their margin isn’t enough to crank in windfall profit taxes or anything like that. Maybe enough to start screaming about taking away their tax breaks, but there should be movement against spectulation before anything else.

    @Roy Hobbs:

    Just a thought concerning the “Obama love-in:” Shouldn’t you be angrier at McCain’s terrible campaign direction since clinching the nomination? He basically hid, let Clinton/Obama dominate the news cycle, and still hasn’t figured out what the hell he’s doing in terms of campaign strategy. The flip from “no negative” to “only negative” is just strange. I mean, sometimes no news is good news, but not when you’re trying to run for President. [/armchair political junkie]

  85. Shaggy says:

    Damn, people are getting worked up…

    Profit margins…Whatever -

    It just seems odd that we are paying $4.50+ per gallon and at the same time they have record profits.

    I don’t care if they are making only .07 on each gallon – they should be regulated by the government, not given tax breaks.

  86. Pithlit says:

    @Roy Hobbs: How do you explain liberals who argue with reason? Or liberals who live in rural areas. Or states like Tennessee? In other words, people like me? It’s tempting to try put us in camps and explain the other side as if it’s some sort of utopia that could never work. It’s not that simple. We aren’t all crunchy granola wimpy types who argue with emotion.

  87. Roy Hobbs says:

    @Pithlit: This sounds like a cliche, but my best friend is a wacko liberal, and if you heard her describe me, she’d say I was a gun-toting reactionary who thinks that the 1750’s were too liberal.

    When we get together and talk politics, we usually spend more time pointing out the absurdity of the arguments and positions put forth by our own sides. The point is that we’ve found a lot of common ground, but that’s because we actually took the time to listen to each other.

    On the flip side, the number of close-minded people that populate this town is truly amazing. I always thought the left was supposed to be the more tolerant of the two political groups: tolerant of alternative lifestyles, embracing diversity, the usual litany of causes. Say you’re a conservative, though, and the walls come down. I’ve seen and experienced it for myself more times than I care to remember over the 10 years I’ve lived in Seattle.

    I gleefully concede that well-reasoned arguments and ideas are put forth by both sides. Just as I readily admit that many of my so-called “conservatives” meet the stereotypes that I pointed out. The political process, by which both parties divide us and slice up our demographic data and pander to our own needs/wants/desires, is what is really screwed up.

    @Nik in NOLA: I cannot think of a worse performance by a candidate than McCain’s last several months. I’m just hoping that he’s saving his strength for when the chips are down and he can pull off a Rocky IV-like upset in late October or early November.

  88. stevejust says:

    @AtomicPlayboy: At the risk of enraging the omnipotent Roz the in charge, to those saying that Bladefist’s posts are well reasoned, I’m going to direct you to the post where he talked about how he ‘pwn3d people at science,’ and then made assertions about how the sun only “transfers” energy and said that electric cars are “inefficient” and that hydrogen is the “only” potential source of alternative energy. For such “well-supported” comments, see:

    [consumerist.com]

    Why would I bring this up yet again? Because I’ve never seen someone so wrong. Though just today, there was an interesting announcement about extracting hydrogen that’s worth following, and is relevant to this post in that it might loosen the grip of XOM on us all:

    [www.guardian.co.uk]

    This link doesn’t vindicate Bladefist on his hydrogen yapping, because you’ve still got the storage issue. I don’t think that we’ll ever have a denser storage option for hydrogen than we will for electricity in batteries taking into account both cost and safety, but I suppose we shall see. This announcement is actually pretty cool if it pans out, because it has other potential applications aside from transportation.

  89. GregGates says:

    “Again, $11 billion sounds like a lot of money, but their profit margin is still only 10%, compared to, say, Citibank which pulls in 35% in a good quarter, yet doesn’t get half the abuse.”

    Wins.

  90. parrotuya says:

    The world is not enough! And it will never be enough. Storm the Bastille! It is time to waterboard CEOs!

  91. shadowkahn says:

    @nycaviation:

    “Again, $11 billion sounds like a lot of money, but their profit margin is still only 10%, compared to, say, Citibank which pulls in 35% in a good quarter, yet doesn’t get half the abuse.”

    So what? $11 billion in profits is $11 billion in profits. Whether the profit margin is 10% or 50%, it really doesn’t matter. They cannot say “well we’re only increasing gas prices because the price of oil is up” and then earn more money than they did last year, and expect reasonably intelligent people to believe them. If you’re only increasing prices in direct response to the increase in raw materials prices, then logically your profits should remain about the same. Posting record profits every quarter for years belies the notion that the finished product price has any sort of a linear relationship to the raw materials price.

  92. Squeezer99 says:

    their profit margin is only 10%, which is pretty low compared to other industries

  93. @stevejust: OK, you’ve definitely chosen a good example of Bladefist being way, way off the mark in his reasoning and in his tone. That still doesn’t mean his arguments aren’t leagues beyond much of the dross that gets put forth by most commenters.

  94. matchsmalone says:

    I’m just trying to imagine what the outcry would be if the Consumerist linked to a Drudge report story.

    I lean right on economics, and I would even agree that linking to a place like the Drudge Report(the closest mirror I can think of to huff) demonstrates a bias. Even if it was only hosting an AP article.

    The fact is, this has been one of the major news stories of the day, and Meg could have just as easily linked to just about any news organization in the country.

  95. scerwup says:

    I don’t much care what kind of profit margin or whatever they are making. That 11 billion does not include any overhead, that was pure profit. And it is still the largest profit of any US company… ever. By the way, it works out to $1500 every second.

  96. puddleglum411 says:

    Everyone, please stop talking about “they.” This is a publicly traded company and unless you don’t have a 401(k) or mutual funds of any sort, you probably own some stock in Exxon. (Full disclosure – my wife’s grandfater worked for Standard Oil, and we as a result are now the owners of a modest amount of Exxon stock)

    @shadowkahn: Dude. Let’s say they sell gas for $1 a gallon, and earn 8 cents on each gallon. This is an 8% profit margin. It cost them $ .92 to produce that gallon of gas. Now let’s say their operating expenses DOUBLE, and now it costs them 1.84 to produce a gallon of gas. And they sell it to you for $2. They earnings just doubled from 8 cents to 16 cents (record profits!), and their profit margin remained the same.

    You seem to want them to increase the price of gas only to the amount their costs increase – in our example, from $1 to $1.92, so they still make 8 cents on the gallon. But this is an absurd business practice that if followed in any industry will quickly put a company out of business. You see, in our example, their profit margins just went down to ~4%. If thier costs double again, then they’re at ~2%. Eventually, people stop investing in companies with profit margins of 2%. As an example, I’m sure you expect more than 2% out your online savings account.

  97. stevejust says:

    OMG! I’ve seen the light. If poor exxon ONLY makes a 10% margin, I now TOTALLY CONCUR that it is outrageous and they must start charging 35% like Citibank and other financial institutions…. or whatever Big Pharma makes, which I think has the second highest margin spread based on the Ads that the Oil Industry placed in NY Times, WaPo, and WSJ when they made record profits last year.

    [smarteconomy.typepad.com]

    Are all of you that keep echoing this comment so dense as not not understand what’s going on? I invite you to stop looking at ExxonMobil’s 10Q reports and start paying attention to the exchange of debits and credits amongst Exxon’s subsidiaries.

    For example, how much does ExxonMobil Exploration Company, ExxonMobil Development Company and ExxonMobil Production Company charge ExxonMobil Refining and Supply Company? How much do their shipping and logistics and pipeline operations charge their Refining and Supply Company to ship its own products through its own distribution networks? And how much of that gets rolled into “business expenses? And how much of those “business expenses” disappear from the net reported? It’s not as easy as saying that ExxonMobil is reporting the total net profits of all their subsidiaries. When people start paying attention to how the accounting is being conducted, then start talking about profit margins. Right now, the truth is being hidden from right in front of your faces.

  98. swimmermike says:

    Pardon me, stevejust, for quoting Glenn Beck, but I really think he makes a good point when it comes to this whole “evil Big Oil profit” scandal.

    In fact, he was just talking about this today in his email newsletter (as part of an argument regarding ANWR):

    “Is it now considered evil to make money in America? If they’re willing to take the risk, survey the land, find the oil, put up the rigs, extract the oil from the ground, put it in the pipeline, deliver it to the refinery, and finally have it shipped to the gas pump, why shouldn’t they make a profit? It’s not a cheap process, and there’s no guarantee of a huge payout in the end. As an example, there’s an oil rig in the Gulf of Mexico, called Thunderhorse, operated by BP (British Petroleum), that before it pumped out even ONE OUNCE of crude oil, it cost BP, $7 BILLION. That’s quite an investment. Thunderhorse is currently pumping around 43,000 barrels per day now, and eventually, they believe it will produce 250,000, but it won’t be up to full capacity for more than 3 years. It’s nowhere near profitable yet.”

    Is there really a problem with companies in one of the largest industries in the country making more money than companies in smaller industries? I certainly hope that is not the direction in which this country is heading. Sure, Exxon’s profits are, well, high, but their profit margins are much different. “Big Oil” executives typically own less of their companies than executives in other industries.

    And remember, folks, those evil Big Oil companies sure make a good deal of money from their own industry. But guess who makes more?

    (Quoting again from Glenn Beck, emphasis mine)

    “Big oil is getting hammered right now by Congress over their profits. But guess who profits more from the oil industry than even the oil industry? Yes, your government. According to the Tax Foundation, from 1977-2004, big oil made $643 billion in profits. Nice. During that same span, Federal and State governments made $1.343 TRILLION in tax revenues from big oil. Nicer.”

  99. ageshin says:

    I guess the poor stock holders probably need as much money they can get to help pay for the gas they use.

  100. jwissick says:

    The government makes 3 time what Exxon does on a gallon of fuel. Keep in mind this is GROSS profits. Exxon still has to pay exploration, research, leasing, refining, and other things too.

    No way the government is gonna regulate them. Exxon pays more in taxes each year than 90% of the population COMBINED.

    If you regulate the gas industry, then you will be robbing people who are invested in the oil companies for their retirement.

    How does Exxon make thing kind of profit? Simple. PURE VOLUME! They not only sell fuel, but pesticides, chemicals for the plastics industry, etc. Just about everything in your life has something to do with oil. EVERYTHING.

    BTW< since when did profits become evil? This is capitalism and they are earning this cause it is what the market will bear.

  101. Canino says:

    If you think any given corporation is making too much money all you have to do is buy some of their stock and some of that money will be yours. You can then give it to the homeless or donate it to PETA or do whatever you want with it. But my guess is that you’ll keep it for yourself.

  102. cmdrsass says:

    @matchsmalone: “The fact is, this has been one of the major news stories of the day, and Meg could have just as easily linked to just about any news organization in the country.”

    The problem is that the editor didn’t link to a news organization or an original source, but instead chose to link to another blog – one with a reputation for sensationalism and bias. The fact that some people can’t see why that is a problem is baffling to me.

  103. stang says:

    Makes me wish I had invested in Oil/Gas companies, Microsoft, Google, etc… When Oil prices were low, M$ was almost unknown, and Google, was about to go IPO.

    I could’ve been retired by now, and siting on the beach on my private island in the Bahamas…..Damn…

  104. Angryrider says:

    Clap, clap, clap.
    Bravo Exxon. Bravo, may your prosperity flow through your arm and up a member of Congress’s back.

  105. EBounding says:

    I know we all just hate when companies post profits, so how about huge losses? General Motors just posted a $15.5 BILLION loss. Do we all feel better now?

  106. Ariah says:

    @nycaviation: Exactly. It’s a very large profit as an absolute number, but not very impressive as a profit margin.

  107. puddleglum411 says:

    lol@stevejust. Really? So Exxon is systematically hiding it’s profits? It’s unclear to me why employees would engage in this sort of activity, when they all own stock in the company.

    I mean sure, with that much money passing through their hands, I’m sure someone somewhere in the company is slipping something extra into thier own pockets. But you are suggesting that Exxon’s profits are substantially higher than what is reported, without giving any evidence or even a well thought out, plausible scenario. Tell me, where does one hide, oh, say, 10 billion dollars? And then tell me why you are certain Exxon has done it. I want to hear all the juicy conspiracy theory details!

  108. Tonguetied says:

    If you think a company is making obscene profits you know which stock to buy…

  109. snowburnt says:

    @Bladefist: but Exxon didn’t stop making money…it just didn’t make 3% more than it did.

  110. Mfalconieri says:

    Capitalism at its best

  111. ltlbbynthn says:

    By their own ads, Exxon’s profit margin went UP from like 9 cents a gallon to 11 cents a gallon between last year and this year.

  112. Reading through these comments has been educational and more than a little entertaining.

    @ Bladefist & his Argumentors:
    Yall know allot more about business than I do I’ll give you that. What I do know is that it doesn’t matter who we have in the White House. I’ll vote as my gut tells me, and know that whether it’s McCain or Obama we’ll be lucky to see any change in the status quo. As a “middle class” citizen making 57K a year I’m not seeing much difference with either party. I just want to stop fighting wars for the “American way” and let’s focus on getting our own house in order before we start telling other nations how to run theirs, and go to war over it.

  113. matchsmalone says:

    @stevejust: I don’t think anyone is necessarily saying that they need to make 35%, we’re just saying that the 8% they did make is not very big, and not worthy of all the vitriol.

    The fact is, the profit margin is the more important number, not the absolute dollar amount. If Vegas offered to pay you 8 cents for every dollar you gambled, you’d tell them to F off. It’s not exactly the same, but when Exxon invests 140 billion dollars, there is a lot of risk in that. Especially with politicians constantly threatening to punish them for providing a product that we all need.

    How much is too much? At what point does a company become evil? Remember that this company is made of PEOPLE, it has employees from every walk of life, and millions of stockholders. It’s not like all 11 billion goes directly into the pocket of three white guys who are sitting in their boardroom cackling right now. If history is any indication, it will mean dividends, which go to help hundreds of thousands of retirees and other people.

    I’d also suggest you take another look at your tin-foil hat assumption that they are fudging their balance sheets. What you describe would be illegal, and yes there are people checking. There is something called the SEC that is tasked with regulating such things. Everytime the price of oil spikes, there is a Congressional investigation into whether or not the oil companies are “gouging” us, and they never find anything. Usually they finish by dragging oil execs in front of Congress so that they can yell at them to make themselves feel better.

    I know that none of this matters to most of the commenters here, and for you it boils down to “oil bad, therefore companies making oil = bad,” but I think you should try to get past your knee-jerk emotional response and think about it logically.

  114. Featherhammer says:

    @jwissick: Subsidized profits can not be questioned if the fall under the guise of capitalism?

  115. matchsmalone says:

    @zundian: Um a deficit doesn’t just imply that the government doesn’t have enough money. It implies that they are spending too much. No matter how much tax revenue the government collects, they will spend it all. The last 80 years or so are certainly evidence of that. Tax revenue has gone up almost every year, and so has spending.

  116. silentluciditi says:

    $11.68 billion would cover the costs for 1,168 wells that would be drilled at a cost of $10,000,000 each. There is no guarantee that all those wells will make money. And I am not exagerrating the cost there. And that’s in a proven field. And even in a proven field there is no guarantee that the well drilled will produce, leaving the oil company (or companies) involved in that well eating their costs. If the well does produce it could take decades for the company to see true profits from that well, not just initial costs being recouped. So, that they have made $11.68 billion in profits (on a profit margin definitely under 20%) is pretty impressive when you look at the rest of the budget.

    Demand is up, costs of production are up (no new refineries in about 30 years in the US, although there is the possibility of one finally being built in the Dakotas), costs of exploration and drilling are up, and profits are up. Everything goes hand in hand. You have choices when it comes to this- Exxon is a pubically traded company- go and buy stock if you want a piece of the pie. Or start your own oil company, or drill your own well. Or reduce your consumption. That might be harder for anyone to do since it would involve not only gasoline (which seems to be the central focus of most), but plastics, household goods, cosmetics, etc. Oil produces more than just gasoline, you know.

  117. Snowblind says:

    @zundian:

    Uh no… they will never turn a profit because THEY SPEND IT ALL.

    All of them, both sides of the aisle, spend all of it and then some. If Exxon did that they would be bankrupt.

  118. jimdoria says:

    @jwissick: Actually, some kind of profits ARE evil, using the classical definition of the term. Usury was forbiddien by the Christian church from about 300 to about 1500, and is still forbidden under Islamic law. So there is some precedent for the idea that making a profit can be a morally evil act.

    The guiding moral principle is largely about abuse of the power of the rich over the poor… increasing their own wealth by driving others to the point of insolvency or starvation.

    Not that we’re talking about moneylending here. The moral principle probably doesn’t even apply. It’s not like people NEED gasoline in order to put food on their table, right? Plus of course, nobody believes in usury anymore. Thank goodness God changed his mind about what’s considered evil in response to the rise of the banking industry.

  119. dondiego87 says:

    The thing that chafes me the most about this is that Exxon REFUSED to pay most of its punitive damages to victims of the Exxon-Valdez oil spill. (“Victims” being Alaskans whose livelihoods were destroyed by the spill — 32,677 of them.) Two court rulings (including the Supreme Court) slashed punitive damages from $5 billion (in 1994) to $507.5 million — that’s only $15,530.80 per person. With such record-breaking profits happening nowadays, such an inconsequential punitive settlement is unlikely to be a deterrent.

  120. matchsmalone says:

    @jimdoria: “The guiding moral principle is largely about abuse of the power of the rich over the poor… increasing their own wealth by driving others to the point of insolvency or starvation.”

    That may have been true during the Dark Ages when guilds restricted entry into the marketplace, but these days we have much more freedom. We have the freedom to take our business to a competitor if we choose, and we have the freedom to start our own business to compete if there is a need for one.

  121. stevejust says:

    @matchsmalone: @matchsmalone:

    I’m not saying Exxon “hides” profits. What I’m saying, primarily, is that the 10Q doesn’t reflect their actual profit MARGIN the way everyone on this post has indicated. They do a lot of transactions between subsidaries that are all owned by them for tax purposes. If ExxonMobil Chemical is paying ExxonMobil Refining, or vice versa, that’s a plus in one their books and a minus in the other’s books. The assumption being made is at the end of the day, all the pluses will add up to what “ExxonMobil” reoprts in their 10Q. What I’m saying is for reasons I can’t go into on a message board that it’s not a zero sum game. There’s all kinds of tax and accounting and devaluation and carry-over accounting techniques that obfuscate their actual P/E earnings ratio.

    Citigroup has a lot of subsidiaries as well, CitiFinancial, CitiBank, etc.,. I don’t think other industries have subsidaries that charge eachother for services in the same way that the oil industry does, at least not to the same extent.

    I could write a book about it, but I can’t explain it in a comment thread. Do your own investigating.

  122. BigFoot_Pete says:

    @shadowkahn:
    This surely can’t be your rational argument. Puddleglum broke it down fairly well, and don’t misread my comment here as a congratulatory pat for oil companies, but the 8-10% profit margin these companies are making are very, very modest.

    I liked the question, what number would be acceptable, as a quarterly/yearly profit, that wouldn’t have people up in arms? If Shell/Chevron/etc. made only 1 million dollars, but it was 50% pure profit, wouldn’t we as consumers have a much bigger problem with that?

  123. Puck says:

    This news is extremely shocking considering who is in office and the public officials in charge for most of the past 8 years.

    Shocking.

  124. AgentTuttle says:

    One of my cars runs on free, used veggie oil from restaurants. It’s not just for hippies anymore.

    “I don’t think Americans are concerned if we’re there (Iraq) for 100 years, or a 1,000 years, or 10,000 years” – John McCain

  125. matchsmalone says:

    @Puck: Are you referring to the Democratic majorities in the House and Senate for the last two years? Oh wait, I forgot, George Bush isn’t President, he’s an omnipotent emperor who is responsible for every event that you disagree with.

  126. matchsmalone says:

    @dondiego87: You’re only mentioning the punitive damages. Exxon also paid compensatory damages to compensate for the damage it caused. Exxon had already paid 3.4 billion in response to the accident.

    The court ruled that they would have to pay for what they had done, and that was fair. They should have to make up for the damage they caused. The problem is that whenever an excessive amount is awarded in punitive damages, it encourages too many frivolous lawsuits. David Souter, one of the more liberal justices, even wrote the opinion in that case, saying that punitive damages should not be any larger than the compensatory damages they had to pay. Meaning it is excessive to make them pay more as punishment than the damage they had caused.

  127. stevejust says:

    @matchsmalone:

    How does a current democratic majority figure into a comment that said, and I quote, “This news is extremely shocking considering who is in office and the public officials in charge for most of the past 8 years.

    Are you Bladefist posting under a different handle? Last time I checked there was a republican majority in the house and senate for 6 of the last 8 years.

  128. Puck says:

    @matchsmalone:

    This is such an ignorant comment that i’m not sure where to begin.

    Clearly you have a strong understanding of government when you think that all the severe harm and damage that’s been caused to the country and world over this administration can be undone by a year and a half (the Democrats didn’t even get elected to the majorities in House and Senate until November 2006 and took office months after that, but hey, why bother with facts, right?) of Democratic rule in one branch of government (the legislative branch, for those paying attention). Someone should also explain to you how vetoes work and how many votes it takes to overcome said veto, but you know what, i’ve spent far too much time with you (30 seconds) already.

  129. matchsmalone says:

    @stevejust: Fair enough. I didn’t see the “most” when I first read it.

    @Puck: As we speak, Nancy Pelosi and the Democrats have adjourned the House and refused to pass any legislation addressing the current energy situation. Many Republicans (and even a few Dems) have stayed in the House to debate the issue, but Pelosi and co. would rather head home for their long vacation. Energy is the number one issue in the country, and they feel they would rather not be bothered to do their job right now. So I guess you’re right, at this rate, it will take decades to accomplish anything useful.

    I would be curious to hear what specific policies enacted between 2000-2006 you disagree with, and why they are relevant to Exxon’s profits. Your earlier comment was kind of a general statement. Were you saying that you’re shocked that the profits are so low? After all, they were lower than expected and the stock took a hit. Or are you shocked because you think it’s profits are too high? What profit margin is considered too high for this industry?

    Look forward to your response.

  130. Raiders757 says:

    @opedog:

    We’ll go by last years population for now.

    July 2007 U.S. population = 301,139,947

    That’s million, not trillions.

    That would only be 302 million dollars if we round it up.

    Not umpteen trillion,as you came up with. It’s very simple math.

    20 billion – 302 million = 19,698,000,000

    A little over 19 and a half billion dollars is still a lot of cash.

    Cheers! I’m going to go cash in my stock now, and donate part of it to the poor!!

  131. matchsmalone says:

    @Raiders757:

    . They could give each and every U.S. citizen one million dollars, and it wouldn’t even dent their wallat.

    Let me help you out here this. Each and every citizen, as you say is 301,139,947. So … 301,139,947 x $1,000,000 = more than 30 trillion dollars. So no, Exxon could not give each and every citizen one million dollars without denting their wallet.

  132. Raiders757 says:

    Ooops, i did put my decimals in the wrong spot.

    Oh well, i’m sure my point was made. People go hungry, yet large companies rake it in like this. Also our government spends over 20 billion dollars a uear on the drug war, yet we still have children going hungry.

  133. Raiders757 says:

    @matchsmalone:

    Thanks for offering help, but I noticed the error of my ways after I posted.

    Still, it’s nice that someone, such as yourself, point it out in a nice way. Unlike the pricks on the first page.

    Cheers!

  134. matchsmalone says:

    @Raiders757: No problem, it’s an easy mistake to make.

  135. drjayphd says:

    @TakingItSeriously: Yeah, but you know a candidate who would actually be interested in rooting out the bad seeds and ineffectual hacks here would be dismissed as “unelectable”. -_-

    @swimmermike: Ahunno, I find it hard to have much sympathy for oil companies and their boosters when they keep demanding more fronts that are increasingly difficult to get up and running (offshore, oil shale, ANWR, etc.) instead of exploring the land they already lease.

    @matchsmalone: Kind of difficult for the Democrats to get anything into law that Bush won’t sign. Only the least meaningful (or most undeniably common sense) laws could get enough support to override a veto. I know, the system’s meant to keep partisan policies from going down the Congressional Slip-n-Slide (a wholly-owned subsidiary of Wham-O!), but that’s not really how it’s working nowadays. Besides, the way the Democrats caved in on retroactive immunity was just shameful.

  136. FrankReality says:

    How many of you read that Exxon’s 1st half 2008 income taxes paid were $20 Billion?

    Or their capital and exploration spending in the first half of 2008 cost $12.5 Billion?

    Profit in the first half of 2008 was $22.5 Billion.

    And Exxon’s tax rate thus far this year is 47%.

    Last, Exxon alone will pay more income taxes than the bottom 50% of taxpayers combined.

    “What gets reported by the media is Exxon’s second-quarter record profits of $11.68 billion for a U.S.-based company, without distinction between profits earned in the U.S. and profits earned outside the U.S.”

    “Exxon is a global company and operates in the United States, Canada, Europe, Africa, Asia-Pacific, the Middle East, Russia/Caspian region, and South America. In 2005, Exxon earned about 70% of its profit outside the U.S. and paid 70% of its income taxes outside the U.S., and in 2006 Exxon earned 71.4% of its profits outside the U.S. and paid 81% of its taxes outside the U.S. Source: Exxon’s annual reports.”

    source – [mjperry.blogspot.com]